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Think global – act local

To succeed in rolling out a multinational FM strategy, you have to separate strategic questions from tactical or operational. Some flexibility is necessary for local adaptation, mainly to national laws, regulations, cultural differences and market practice.

The previous issue of Nova reported how an increasing number of large Nordic corporations and non-profit organisations are considering multinational FM/IFM solutions. Jens Ebbe Rasmussen, a Business Development Manager at Coor, and Joakim Karlsson, Partner of global strategy and management consulting firm A.T. Kearney*, have both worked on strategic business development and outsourcing matters for several years. They have addressed and studied the issues that arise when taking an overall grasp of FM issues in a multinational organisation.

"Multinational solutions are largely driven by streamlining and cost savings, but also by gaining a better overview and more standardisation. Many multinationals want to work more consistently cross-border or between regions," comments Joakim Karlsson (A.T. Kearney).

Jens Ebbe Rasmussen (Coor) agrees, but also identifies risk minimisation and risk control as important drivers.

"For global operations with strong brands, good supplier control is an important issue. Common principles and standards on issues affecting human rights, working conditions and production methods are becoming more common. This also impacts on FM issues, where matters like cash-in hand labour are central. A global grasp of FM issues makes it easier to be able to control and monitor these issues well in all parts of operations, helping enhance risk control," adds Jens (Coor).

The importance of a clear FM strategy

Jens and Joakim firmly agree that a clear FM strategy tailored to a company's overall strategy, circumstances and culture is vital. Such strategies must always proceed from the unique circumstances of each organisation—replicating someone else's concept just isn't feasible.

When formulating an FM strategy, three main types of issue must be addressed: organisational (responsibility, reporting structure, etc), contractual (definitions of constituent services, minimum standards, etc.) and commercial (pricing models, etc.) The big challenge lies in formulating a global FM strategy in terms of its principles and on an overall basis.

"You can't ignore the fact that FM strategies are always delivered and consumed locally, and so must always be adapted to local circumstances. First and foremost, there are national differences that you have to consider: legislation, culture, political context, tax system and so on. Think global—act local," as Joakim (A.T. Kearney) puts it.

"Yes, you just have to think of the complexity of operating staff restaurants or pension schemes when taking on staff. Circumstances differ completely between all the Nordic countries, so the optimal solution differs from country to country. That's why you have to do a trade-off between levels and standardisation and local flexibility," explains Jens (Coor).

Supplier structures often a decentralised question

At present, there are multinationals that are in agreement with a single global supplier, but this isn't common. Most global players opt to deal locally with the matter of who should deliver FM.

"When you work on international issues, it's important to separate strategic issues from the operational and tactical. When you link up global approaches, this doesn't necessarily mean you have to choose a single global supplier. What's important is having a framework and control model in place—the party delivering services is usually a matter that is decentralised regionally or nationally," adds Joakim (A.T. Kearney).

Sequential or parallel roll-outs

Once a strategy is designed and is ready to be rolled out through a multinational operation, this can be achieved in two ways: sequentially or in parallel—like a big bang through the operation all at once.

"My advice is to start on a smaller scale. The complexities are so great and your prospects of success are obviously best if you start by piloting your strategy as a single plant or office, or possibly, in one country. Then roll your strategy out gradually, comments Jens (Coor).

Joakim (A.T. Kearney) agrees, but points out that the time dimension is important to sequential roll-outs.

"Actually one 'big bang' is optimal, but hard to execute in practice. But you've got to keep your tempo up. The benefits of a multinational strategy aren't achieved until the strategy is implemented in several sites, and it's important to be able to demonstrate the benefits of the change fairly quickly. If it takes too long, it becomes uneconomical and hard to justify," concludes Joakim (AT Kearney).

Read more:

In the next issue, we'll be writing about how national FM managers in multinationals can prepare for the smooth implementation of multinational FM strategies.

* Key facts:

A.T. Kearney is a leading global strategy and management consulting firm. It supports leading organisations on strategy formulation, business development and operational efficiency. A.T. Kearney was founded in 1926 and has long been regarded as a leader in strategic procurement and the effective management of strategic supplier relations. In the Nordic region, it has a raft of leading corporations in each country and sector in its client base.